On the contrary, Walmart has reduced its operating expenses or overhead costs through implementing an advanced accounting information system, including management accounting practices. However, overhead costs are becoming prominent, and these might arrive at more than half of total manufacturing costs. According to Alsharari, there is no problem if all cost items could be directly traced to each cost center, so accurately calculating the product cost and profitability would be very easy. One of the management accounting practices that can influence social activities is operating cost or overhead cost. Conversely, accounting ramifies, extends and shapes the social’. Walmart’s retail business has no exception as ‘the social, or the environment passes through accounting. The final section is the main conclusions and recommendations.Ĭontemporary accounting studies have shed light on how accounting is practiced in social activities and arrangements. Section 4 explains the analysis and discussion of the chapter, and Section 5 introduces the SWOT analysis of Walmart’s business. Section 3 provides the research methodology and US case study. Section 2 presents the literature review. This chapter is divided after the introduction as follows. Such risks affect the reliability of an accounting system and its ability to ensure operational efficiency. This means that gaps in control and security mechanisms could affect the company’s financial information confidentiality. Gilbertson and Lehman observed that the main limitation to the vision suite software is its vulnerability to hacking and computer viruses. This helps the management access vital reports used in the decision-making process. Vision suite software automatically generates accounting documents for use within the company’s accounting system. Gilbertson and Lehman noted that Walmart has, specifically, installed the vision-suite accounting management software, composed of different financial management functions that include the general ledger, financial reporting, and integration of external accounting systems. The paper analyzes Walmart’s management accounting system by discussing its inventory control and accounting practices, including its budgeting, costing, and capital decision making as presented in the capital structure to establish the strengths and weaknesses of its accounting system. This factor aids the company’s decision-making process at the operational level. Walmart’s Accounting System enables the company to make accurate projections of its stores’ financial sales and purchases. The system contains the details of daily transactions from every store. The Asian economy is proliferating, making China and India significant markets for Walmart ( ibid.).Īs a retail corporation, Walmart collects information on its stores, sales, and purchases through a centralized accounting information system connected to all stores. Walmart has also increased its existence in China, where there were 439 stores in 2017. Besides, the UK had 631, Canada 410, and Brazil 498 Walmart stores operated in 2017. The majority of Walmart stores outside the US are placed in Mexico as it has 2,411 Stores. In 2017, the total number of stores had 11,695 stores, of which 5,332 were located in the United States, and 6,363 were located overseas. Walmart stores have been grown rapidly as they become very popular as a retail giant. Walmart is one of the world’s largest global retailers, operating discounted, departmental, and warehouse stores across various jurisdictions. Integrating E-business technology with accounting practices and other organizational domains is excellent evidence for the 21st Century Approaches to Management and Accounting literature. This study can be considered one of the few studies examining the management accounting practices in the United States case study, Walmart Corporation. The efficiency of an accounting system is crucial for the performance and sustainability of Walmart’s business. The diffusion of managerial accounting information is very important for the budgeting process and costing of all departments. This study found that Walmart uses a management accounting system for efficient store planning, controlling, and other management-related activities to enhance organizational effectiveness and performance. This study uses qualitative methods and websites methodologies underpinning the interpretive approach to explain a detailed case study in the United States. This study aims to explain management accounting practices and E-Business model in the US Walmart Corporation.
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